The franchise model has been around for decades. Some of the biggest brands in the world have used it to make their name, from McDonald’s to Starbucks.
And it’s still an incredibly popular method of starting and running a business. Here in the Middle East, it perhaps more popular than ever.
At the end of last year, the franchise economy had an estimated value of USD 30bn with annual growth of 27%. This makes it the fastest-growing non-oil market in the Middle East.
It’s no surprise that the franchise model is on the up in the region. Dubai is already a popular destination with investors, encouraged by its 0% corporate and personal tax rate, perfect location, and straightforward company incorporation process. Add a proven business model to this, and there’s plenty to like.
Running a successful franchise is by no means easy. It takes skill, drive and determination. But when armed with the right knowledge, and with the help of a company setup agent, starting your franchise in Dubai can be both fast and straightforward.
Becoming a franchisee — start with research
Dubai’s franchise market is as diverse as it is vast, so the first step is to conduct thorough research.
If you are undecided on your market, this should be your starting point. Look into the most lucrative industries and choose the one that aligns best to your knowledge and expertise.
Once you’ve found your industry, choose a brand that you believe in. Next, you must conduct due diligence – seek out reviews and testimonials from franchisees.
If available, request a Franchise Disclosure Document from your potential franchise. This contains information on the financials of the company, as well as your responsibilities as a franchisee.
Understanding the types of franchise business in Dubai
Before becoming a franchisee, you’ll need to gain an understanding of the types of setup available.
There are two types of franchise recognised by the Dubai Trade Register:
Single-unit franchises: As the franchisee, you will sell the products and services of the franchisor through a single company.
Multi-unit / developed franchises: The franchisee is permitted to open several units which are operated by a single company.
Get the right business license
While it is possible to open a franchise in the Dubai mainland or in a Dubai free zone, the latter is often the easiest and most cost-effective option. Free zone business owners can retain 100% ownership.
The license and setup type that’s right for you will depend on several factors. The best approach is to work with a local expert such as Business Incorporation Zone (BIZ).
We can advise on the right location, license, and setup to suit your needs, managing all applications on your behalf.
Starting a franchise – the step-by-step guide
There are several steps to undertake before you can operate a franchise in the UAE. BIZ can assist with every step.
Step 1: Choosing your company name
There are a few key things to keep in mind at this stage – many that would not apply anywhere else in the world.
Be aware that you must abide by a strict set of naming conventions. You should avoid any offensive or blasphemous language. Avoid names of well-known organisations and avoid abbreviations if naming your company after yourself – i.e. Dave Mann Consulting, rather than D Mann Consulting.
Step 2: Applying for your trade license
You’ll need a trade license to operate a franchise in the UAE. The application process will differ depending on whether you opt for a free zone or mainland setup.
In both cases, however, BIZ can manage this process for you, dealing with authorities and ensuring all licenses and approvals are in place.
You will usually need to provide some basic documentation, including:
- Completed application form
- Passport copy of the proposed owner or owners
- Two colour passport size photos.
Step 3: Applying for your visa
You’ll need a visa to work in the UAE. BIZ can also manage this process for you, though you will be required to undertake a medical exam.
As the holder of a UAE business license, you can sponsor others for their visas too. This could be a spouse, parent or child, or a domestic worker such as a housekeeper.
The maximum number of visas you can apply for will depend on the size of your company, your chosen setup and, for dependant’s visas, your personal earnings.
Step 4: Opening a corporate bank account
Finally, you’ll also need a corporate bank account to do business in the UAE.
Before making your application, you should first familiarise yourself with several financial institutions to find one that is best suited to your business needs and most likely to offer you corporate banking services. Once again, your company setup agent can help you with this process.
Are you ready to start a franchise in Dubai, UAE?
Hopefully, this guide has made clear that if you’re armed with the right knowledge, setting up as a franchisee in Dubai doesn’t have to be overly complex.
That being said, it does require a level of prior knowledge of the process. What’s more, it is important to note that the application process is only straightforward if your license application is complete at the time of submission and free from errors.
To help you to ensure that this is the case, it’s a good idea to work with a company formation specialist such as BIZ when establishing a new company in the UAE.
We are a team of company registration professionals who are passionate about bringing the dreams of aspiring entrepreneurs and SMEs to life.
As well as handling your license application, BIZ can also assist with the opening of corporate bank accounts and advise on the most appropriate financial institution to suit your specific needs.
We also offer visa and immigration services and can handle all government formalities, permissions, work permits and visas applications that are required to trade in the UAE.
In short, our experts can establish your company on your behalf, make your license and visa applications, and take care of all the necessary admin – leaving you free to get on with running your business.